Mitchell Corporation Has Current Assets of $1600000 and Current Liabilities

question 40

Multiple Choice

Mitchell Corporation has current assets of $1600000 and current liabilities of $750000.If they issue $200000 of new stock what will their new current ratio be?

• A)2.4:1
• B)1.9:1
• C)1.7:1
• D)2.13:1

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Definitions:

Direct Material Usage

The quantity of raw materials or supplies consumed in the production of goods or services.

Raw Materials Inventory

The total cost of all components and materials stored that are intended to be used in production.

Accounts Payable

Accounts payable represents the company's obligation to pay off a short-term debt to its creditors or suppliers.

Conversion

The process of changing an asset or security into another form, such as converting preferred stock into common stock or converting currencies.